T
he economic inclusion of a new immigrant community contrib-utes to opportunities for upward mobility. Economic inclusion benefits not only the newcomers but also the receiving com-munities that offer immigrants economic incorporation. The well-known story of the economic recovery in Lewiston, Maine, stands as a case in point. Prior to the Somalis’ arrival, Lewiston lacked a low-skilled labor force and had an overabundance of unoccupied rental units. When Somalis arrived in the area, they resolved both of these problems. Meaningful economic contributions from the Somali pop-ulation in Lewiston altered the popular perception of Somalis—and immigrants more generally—as a menace to a group of productive stakeholders (Voyer 2013).In this chapter, I argue that economic incorporation is inextri-cably required for Somalis’ economic advancement. In an ideal sce-nario, the economic opportunity structure is open to newcomers, who are able to take advantage of these conditions. Although build-ing wealth is more challengbuild-ing today compared to the experience of previous generations, one would expect immigrant communities to show progress toward economic self-sufficiency after a period of time. Somalis, like other large refugee communities, arrive in the
United States with the ability to seek legal employment almost imme-diately. However, the majority of Somalis who arrive in the United States as refugees do not hold advanced degrees, and many arrive with limited English-language skills. This situation inherently limits their chances of significant upward mobility, because their employ-ment options are often restricted to low-skill and low-wage positions that typically do not offer opportunities for advancement. The chal-lenges that this phenomenon presents for social incorporation are addressed in Chapter 6. Meanwhile, even Somalis who arrive in the United States with advanced degrees face hurdles, as their education-al credentieducation-als are not education-always recognized. It is not unusueducation-al to meet a Somali taxi driver or warehouse worker who held a prominent posi-tion in Somalia before the civil war.
This chapter demonstrates that even in the Twin Cities, a region that offers greater Somali economic incorporation than is found in Columbus, there remains significant room for improvement. Yet in both areas, Somalis have made important contributions to the local economies that benefit their communities as well as their cities more broadly. Despite these contributions, Somalis are somewhat excluded from upward mobility. Comparing their situations in each area can help us understand why this exclusion has occurred and why Somalis in the Twin Cities see less of it. Certain structural factors in the pri-vate and public sectors have encouraged economic incorporation in the Twin Cities, factors that are explored in detail in this chapter. In places that lack these factors—such as Columbus—Somali economic incorporation is weaker, and their situation is more dire. By under-standing more about the ways in which economic incorporation is facilitated, we can help shape better outcomes for Somali immigrants and the cities they call home.
The concept of economic incorporation benefits not only new immigrants individually but also society more broadly. Research on immigrant capital points to the important contributions immigrants make in urban America that contribute to societal wealth (Corrie 2008, 2). In examining the dimensions of immigrant capital, Bruce Corrie posits that immigrant consumer capital involves the purchas-ing of goods and services by immigrants (2008, 2). Their purchaspurchas-ing power also has a positive effect on tax revenue. Immigrant
produc-tive capital, meanwhile, refers to immigrant participation in the labor force (2). In addition to the low-skilled workforce that a new immi-grant community can provide, those with higher-end skills can also help advance the labor force. Finally, immigrant entrepreneurial cap-ital holds the promise of revcap-italizing areas where immigrants live (2).
In terms of the three dimensions of immigrant political capital, one can argue that Somalis in Columbus and in the Twin Cities add to the consumer capital, productive capital, and entrepreneurial capi-tal in their communities. What is less clear is whether they are able to take full advantage of the economic opportunity structure, some-thing I argue is central to their economic incorporation.
The indicators of Somali economic incorporation reflect tradi-tional economic measures combined with some that are less con-ventional. This chapter’s analysis begins with an examination of household income, followed by a discussion of Somali employment levels. After casting light on the economic vulnerability of Somalis via these measures, attention is given to private-public sector inter-vention as a factor in economic incorporation. Homeownership rates are the final measure of economic incorporation, accepting the tra-ditional American view that equity through homeownership con-tributes to financial growth. The ability to buy rather than rent a home can provide a more stable and cost-effective livelihood. But given the religious constraints associated with interest-bearing loans, many Somalis are restricted from full participation in the Ameri-can economy. The consequences of this phenomenon Ameri-can be seen in Somali homeownership rates. Before delving into the factors that influence the economic incorporation of Somalis in Columbus and in the Twin Cities, remittances are discussed as one of the most pressing economic concerns among Somalis in the United States.
Remittances
Remittances provide those in the Somali diaspora a means to sup-port relatives who remain in Somalia or in refugee camps in Africa.
Because of the ongoing war in Somalia, the country does not have a functioning and reliable economic structure. For this reason, family members living outside the country often support multiple relatives.
Virtually all respondents in this project reported sending significant portions of their monthly earnings back to Somalia to support fam-ily members. Paying for food, medicine, and the education of young relatives were all mentioned as common reasons for remitting. These financial responsibilities place a heavy burden on Somalis in the dias-pora. One respondent explained:
Knowing that you’ve had the chance to start a new life and make a living increases the sense of obligation you feel for those left behind. Knowing that they are struggling leads to constant concern for their well-being. Also, the responsibility for their survival is in your hands. (Columbus community member in-terview, July 24, 2013)
The challenges associated with new restrictions on remittances raise significant concerns among Somalis in this study. The external pressure they face to support relatives is an issue that overshadows their economic incorporation in the United States.
Research on immigrant remittances indicates that sending money back home is often a priority for those who come to the United States in search of economic opportunity, but less work has been done on uncovering the differences between refugee and other immigrant group remittance practices and implications (Horst 2004, 2). Yet concern about the potential for remittances flowing from the Somali diaspora into the hands of terrorist organizations like al-Shabaab has resulted in major barriers for remittances to Somalia.
According to a 2013 Oxfam report, 16 percent of the $1.3 billion that flows to Somalia in the form of remittances each year comes from the United States (Orozco and Yansura 2013). The Somali form of remittances is known as the xawilaad (Horst 2004, 3). This sys-tem is largely informal and is used by individuals to remit funds to relatives as well as by nongovernmental organizations (NGOs) and humanitarian organizations to provide much-needed aid (Horst 2004; Horst and Van Hear 2002). Before the Somali civil war in 1991, remittances were primarily sent by Somali migrants to help relatives with investments, weddings, school fees, and other economic ven-tures. Transnational xawilaad organizations emerged in the 1980s to
help create fast and reliable ways to transfer funds (Horst 2006, 5).
After 1991, when Somalis began moving to the West as refugees, the xawilaad took on a more dire purpose—ensuring the survival of fam-ily members at home in Somalia or in refugee camps in other coun-tries (Horst 2004, 2006, 2008). Ihotu Ali’s (2011) work documents the complex reaction among Somalis to the devastating news that a group of money-wiring services would close. A Somali respondent in Ali’s study explained:
When Al Barakaat was closed, everybody felt that the others would be closed. Families back home were calling, [saying,]
“Will I be getting this month’s money, what’s going to hap-pen?” People here didn’t know. Some people here even went so far as, “Should I even go to these places to send money? What if I’m accused of sending money?” Some people came to me, and said, “Can I go to this one that’s open? Can they trace me back?” We tell them sending money is not a crime. (Quoted in Ali 2011, 96)
Cindy Horst’s (2006) work documents the significance of remit-tances from Minneapolis to relatives in Kenyan refugee camps. Her extensive fieldwork in Minneapolis revealed a strong sense of respon-sibility among respondents for the financial stability of relatives on the African continent. Findings from the research for this book par-alleled what Horst found, although mine included increased concern about terrorist connections.
Of the three main Somali remittance companies in the United States, one is headquartered in Columbus. The president of that orga-nization explained:
At present, remittances from abroad—from Somali expatri-ate communities and from international development and charitable organizations, such as the United Nations, Save the Children, the Red Cross, and CARE—are the principle source of funds in Somalia. All of these remittances, all of this chari-table aid is delivered to Somalia by remittances companies like Dahabshil. (Dahabshil letter 2015)
Remittance companies, such as Dahabshil, play a vital role in monetary distribution, because Somalia has neither a banking system nor a stable government. Unemployment is rampant, and thanks to the country’s political and economic instability, the World Bank and the International Monetary Fund (IMF) do not provide international aid to Somalia. Dahabshil’s president wrote:
In the absence of a banking system, even international relief organizations like the Red Cross and CARE must use remit-tance companies such as Dahabshil to fund their project, meet their payroll, and pay their rent. . . . If remittance companies are unable to do business because of actions of the banking community in the U.S., it affects not only private remittances between family members but also large-scale charitable efforts of the worldwide community. (Dahabshil letter 2015)
Changes in the U.S. policy toward Somali remittances stems from government concern that funds are making their way to terrorist organizations in Somalia. These concerns emerged in the post-9/11 era and intensified once evidence of money laundering to support al-Qaeda emerged. The United Nations has also identified instances when terrorist financing has occurred through Somali remittance organizations (Cockayne and Shetret 2012, 34). Because the xawilaad is primarily self-regulated, meaning that internal records are the pri-mary way to manage transactions, concerns about terrorist financing are expressed by regulators worldwide. The process of “debanking,”
or the refusal of banks to do business with xawilaads, has intensified in recent years (46).
In 2011, Barclays Bank ended its work with Somali remittance organizations because of evidence that two Somali women in Min-nesota had sent money intended for al-Shabaab. Since that time, the situation has worsened, as a growing number of banks have cut ties with xawilaads. By the start of 2015, only one bank in the United States—Merchants Bank in California—continued to work with Somali remittance organizations to facilitate money transfers. The bank ended these relationships on February 6, 2015, as a result of
pressure from regulators (Hatcher 2015). Congressman Keith Ellison has called this decision catastrophic. He explained:
For the past few years, I have been warning every regulator and official about the devastating effects of closing the last safe and legal pipeline to provide humanitarian remittances to Somalia. . . . There is no doubt that a decline in remittances will exacerbate the humanitarian crisis and erode the gains Somalia has made in recent years. (Ellison quoted in Hatcher 2015)
Congressman Ellison has been the primary voice for Somali remittances in the U.S. Congress. In 2014, he sponsored the Money Remittances Improvement Act (H.R. 4386), “which would make it easier for well-regulated nonbank institutions such as money ser-vice businesses to provide remittances to their customers across the globe” (Ellison 2014). The bill passed in both houses and was signed into law by President Barack Obama in August 2014. It essentially facilitates continuing remittances, but in a way that addresses secu-rity concerns. Although it has increased regulation and made the remittance process more restrictive for Somalis, the community’s ability to send money remains intact. This bill represents the most concrete example of how the political incorporation of Somalis in the Twin Cities helped them accomplish their goals. As Ellison’s press release about the passage notes, the bill was supported by a broad range of groups, including banking professional associations, reg-ulatory groups, and international organizations like Oxfam. More importantly, local organizations in Minneapolis, including the Somali American Remittances association, Somali Action Alliance (SAA), and the Confederation of Somali Community in Minnesota (CSCM), also collaborated for the passage of this bill (Ellison repre-sentative interview, July 11, 2014).
Omitted from much of the discourse on resources landing in ter-rorist coffers is the possibility that remittance restrictions could make family members back in Somalia more vulnerable and dependent on extremist organizations. As one respondent explained:
The hostility toward the West is likely to increase if funds are completely cut off. This situation creates tremendous anxiety for Somalis outside of Somalia, who know that their support is the only way their family can survive. (Twin Cities community member interview C, June 4, 2014)
The scholarship of Horst and colleagues sheds additional light on the misconceptions associated with remittance crackdowns (Horst et al. 2014). Conducting interviews in Norway between 2000 and 2008, a group of researchers identified the normative judgments about migrants’ financial and personal decisions to send money to family members abroad. They found that sending remittances made migrants more suspicious in the eyes of host country natives and led to questions about a migrant’s loyalty and potential ties to terror groups. These normative assertions have had negative structural and emotional consequences for Somalis in Norway, and no doubt simi-lar judgments have produced simisimi-lar effects in the United States. As Anita Waters (2012) explains:
Many transnational migrants retain ties to their homeland through political participation, remittances, and communica-tion. . . . This transnational character may affect the reception of Somalis by casting doubts on their commitment to remain in the United States or their ability to fulfill their duties as citizens.
The commitment to supporting family members in Somalia or other countries of the diaspora is a high priority for the majority of respondents in this project. Yet maintaining ties to relatives does not translate into rejecting an American identity, nor does it indicate support for, either directly or indirectly, terrorist activities.